AProject ReportOnTop 10 Trends in Retail Industry

Submitted To:- Submitted By:-Mrs. Priyanka Singh 1.Nitin Kumar Goyal (014-II-229) 2.Akash Saini (014-II-205) 3. Vibhaw (014-II-247) 4.Chatrapal Singh (014-II-24) 5.Sudhanshu Shekhar (014-III-31) 6. Amit Kumar (014-II-310)

Retail Industry in India

Introduction:-

India has occupied a remarkable position in global retail rankings on the back of high market potential, low economic risk, and moderate political risk. In market potential, India ranks fifth after the United States, China, Brazil and Canada. Retail market in India is expected to reach US$ 1.3 trillion by 2020 from US$ 490 billion in 2013.

Of the overall retail market in India, unorganised players controlled 92 per cent market share during 2013. Organised retail is expected to account for 24 per cent by 2020. Food and grocery accounted for nearly 69 per cent of total revenues in the retail sector, followed by apparel (8 per cent) in 2013. Rapid emergence of mega malls and hypermarkets are augmenting the growth of organised retail in the country.

The Government of India has approved 51 per cent foreign direct investment (FDI) in multi-brand retail and increased foreign direct investment (FDI) limit to 100 per cent in single-brand retail and cash and carry (wholesale) trading and exports. It also plans to introduce Goods and Service Tax (GST) as a single unified tax system from the next fiscal year.India's strong growth fundamentals, along with increased urbanisation and consumerism, offer immense scope for retail expansion for foreign players. Rapid emergence of organised retail outlets, such as mega malls and hypermarkets, are augmenting the growth of organised retail in the country. Retailers have made constant improvements in supply chain and logistics for competitive advantage and meeting consumer demands. E-commerce is expected to be the next major area for retail growth in India. The industry is projected to touch US$ 200 billion by 2020.

The Indian retail industry has presently emerged as one of the most dynamic and fast paced industries as several players have started to enter the market. It accounts for over 10 per cent of the countrys gross domestic product (GDP) and around eight per cent of the employment in India. The country is today the fifth largest global destination in the world for retail.Several corporates have planned to exploit the opportunities in the Indian retail space, such as Reliance Industries Ltd (RIL), which has lined up capital expenditure of Rs 1.8 trillion (US$ 28.94 billion) for the next three years for its petrochemicals, telecom and retail ventures.With the growth in the retail industry, the corresponding demand for real estate is also being created. Further, with the online medium of retail gaining more and more acceptance, there is a tremendous growth opportunity for retail companies, both domestic and international.

Market Size:-

Indias retail market is expected to double to US$ 1 trillion by 2020 from US$ 600 billion in 2015 driven by income growth, urbanisation and attitudinal shifts, highlighted the Boston Consulting Group and Retailers Association of Indias report titled, Retail 2020: Retrospect, Reinvent, Rewrite.While the overall retail market will grow at 12 per cent per annum, modern trade will grow twice as fast at 20 per cent per annum, and traditional trade at 10 per cent, according to a report titled Retail 2020: Retrospect, Reinvent, Rewrite by Boston Consulting Group and Retailers Association of India.The retail spending in the top seven Indian cities of India currently amounts to Rs 3.58 trillion (US$ 57.56 billion), with organised retail penetration at 19 per cent in 2014. It is expected that the online retail will be at par with the physical stores in five years

Market size of Indian retail industry:-

The total market size was US$ 490 billion in 2013, registering a CAGR of 6.1 per cent since 1998.

India is expected to become the worlds fastest growing e-commerce market on the back of robust investment activity in the sector and the rapid increase in internet users. It is expected that Indias e-commerce market will grow from US$ 2.9 billion in 2013 to over US$ 100 billion by 2020.E-tailers are betting on more Indians switching to shopping online, with a projection of 200 million new consumers by 2017, according to a report released last year by Accel India,

Investments:-

The Indian retail industry in the single brand segment has received foreign direct investment (FDI) equity inflows to the tune of US$ 275.38 million in the period April 2000January 2015, according to the Department of Industrial Policies and Promotion (DIPP).With the rising need for consumer goods in different sectors including consumer electronics and home appliances, many companies have invested in the Indian retail space in the past few months. Some of them are:

Paytm plans to set up 30,000 to 50,000 retail outlets where its customers can load cash on their digital wallets. The company is also looking to enrol retailers - mostly kirana stores - as merchants for accepting digital payments. Mobile wallet company MobiKwik has partnered with Jabong.com to provide mobile payment services to Jabong's customers. DataWind has partnered with HomeShop18 to expand its retail footprint in the country. Under the partnership, HomeShop18 and DataWind will jointly launch special sales programs across broadcast, mobile and internet media to create greater access of the latter's tablet range. Amazon Inc and Flipkart India will invest nearly Rs 2,300 crore (US$ 369.87 million) in the near term as they plans to acquire more customers in the country's fast-growing online retail market. FashionAndYou has opened three distribution hubs in Surat, Mumbai and Bengaluru to hasten deliveries. Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 401.98 million) in a fruit and vegetable processing unit, an integrated meat processing unit and a modern shopping mall in Hyderabad, Telangana.

Investment options in organised retail India:-

Real estate's retail component is an attractive opportunity, which is currently attracting 29 per cent of total investment in real estate.

Indian retail industry break-up by revenues:-

In 2013, food & grocery accounted for nearly 69 per cent of total revenues in the retail sector, followed by apparel (8 per cent).

Government Initiatives:-

Ms Nirmala Sitharaman, Union Minister of Commerce and Industry, Government of India has stressed on India building a culture of branding and marketing its products to the rest of the world. The ministry is also willing to take steps to start a Free Trade Agreement (FTA) with the European Union (EU).

The Government of India has taken various initiatives to improve the retail industry in India. Some of these initiatives are:

The Foreign Investment Promotion Board (FIPB) has cleared five retail proposals worth around Rs 420 crore (US$ 67.53 million) from companies such as Bestseller, Puma SA and Flemingo. Additionally, the board cleared three 100 per cent single-brand retail proposals worth Rs 222.5 crore (US$ 35.77 million), suggesting renewed interest in Indias growing retail market. IKEA has entered into a memorandum of understanding (MoU) with the Government of Telangana to set up its first store in India at Hyderabad. IKEA retail outlets have a standard design and each location entails an investment of around Rs 500-600 crore (US$ 80.38-96.46 million). The Government of India is also in the final phase of talks with the states for the Goods and Services Tax Bill to be implemented. This Bill is seen as a key to facilitating industrial growth and improving the business climate in the country.

Road Ahead:-

The share of e-Commerce is growing steadily. Customers have an ever increasing choice of products at the lowest rates. E-Commerce is probably creating the biggest disruption in the retail industry and this trend will continue in the year to come. Almost everything is sold on the internet now and this means that pretty much all of the retail industry faces the challenge of either being a part of e-commerce or taking it head on.For better prospects of this industry, as a whole, both organized and unorganized retail companies should work together to improve the overall retail industry, while generating new benefits for their own customers.Also, the retailers should take advantage of digital retail channels (e-commerce), which would enable them to spend less money on real estate while reaching more customers in tier-2 and tier-3 cities. Nevertheless, the long term outlook for the industry remains to be positive on the back of rising incomes, favourable demographics, entry of foreign players and increasing urbanization.Exchange Rate Used: INR 1 = US$ 0.016 as on March 24, 2015.

Various Retail Sectors In India:-

Liberty Shoes have been fashioning footwear for well over 60 years for the style- conscious people around the globe. Currently with an annual turnover exceeding Rs 6 billion (US$ 150 million), the company is amongst the top 2 manufacturers of leather footwear industry in India, producing more than 50,000 pairs a day using a capacity of more than 0.3 million square feet of leather per month. Helping to dress up the feet of the fashion-driven and quality-seeking customers in more than 25 countries, which includes major international fashion destinations like France, Italy and Germany, is the worldwide distribution network of 150 distributors, 400 exclusive showrooms and more than 6,000 multi-brand outlets. The companys commitment to quality is also evidenced by the ISO 9001: 2000 certification.

V2 Retail Ltd is one of fastest growing retail groups in India. The company offers a portfolio of products, including apparel and non-apparel. The company sells readymade, apparels, household merchandise and other consumer goods like footwear, toys, games, handbags, fragrance, cosmetics, home furnishing, dcor product, sports items, crockery, novelties and gifts. V2 offer affordable family fashion at prices to suit every pocket.The outlets cater to almost all price ranges. The showrooms have over 70,000 products range which fulfills all household needs. V2, which stands for 'value and variety' sell fashion garments at prices 50-70 per cent lower than other clothing brands through large s

Bharti Retail Ltd is a wholly owned subsidiary of Cedar Support Services Ltd which belongs to the Bharti Group of companies. It owns and operates neighbourhood stores called Easyday and compact hypermarket stores called Easyday Market. These stores provide consumers immense value and wide choice with products of great quality at affordable prices. The neighbourhood format stores offer more than 3,000 products at the lowest prices.The first Easyday store was launched in Ludhiana and Easyday Market in Jalandhar, in 2008. Currently, there are over 210 stores across Punjab, Haryana, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Rajasthan, Himachal Pradesh, Chhattisgarh, NCR Delhi, Jammu and Kashmir, Maharashtra and Karnataka.

Bata India is the largest retailer and leading manufacturer of footwear in India and is part of the Bata Shoe Organisation. It was incorporated as Bata Shoe Company Private Ltd in 1931 and was set up initially as a small operation in Konnagar (near Kolkata) in 1932. In January 1934, the foundation stone for the first building of Bata's operation - now called the Bata - was laid. In the years that followed, the overall site was doubled in area. This township is popularly known as Batanagar. It was also the first manufacturing facility in the Indian shoe industry to receive the ISO: 9001 certification.The company went public in 1973 when it changed its name to Bata India Ltd. Today, Bata India has established itself as India's largest footwear retailer. Its retail network of over 1,200 stores gives it a reach/coverage that no other footwear company can match. The stores are present in good locations and can be found in all the metros, mini-metros and towns. The company also operates a large non-retail distribution network through its urban wholesale division and caters to millions of customers through over 30,000 dealers.

Aditya Birla Retail Ltd is the retail arm of Aditya Birla Group, a US $40 billion corporation. Aditya Birla Group has three retail companies Aditya Birla Retail, Madura Fashion & Lifestyle and Pantaloon Fashion & Retail Ltd. The Group has a presence across 150 cities in India.The company ventured into food and grocery retail sectors in 2007 with the acquisition of a south-based supermarket chain. Subsequently, Aditya Birla Retail Ltd expanded its presence across the country under the brand More with two formats

Top 10 Marketing Trends in Retail Industry:-

1.Boomers and Millennial will continue to heavily influence retail:- Most boomers will be in their 60s and 70s next year, and retailers that cater to these consumers would need to adjust to make shopping easier for them. As consulting firm PwC noted, the Baby Boomer generation will age with increased financial resources and with a greater emphasis on youth and vitality than previous generations. As a result, they not only will tax manufacturers to adapt products to their specific post-retirement needs, but also will require retailers to respond to their evolving needs as they approach the age of 70 in 2015.Retail expert Georgenes Bender pointed out inVOAnews.comthat this can already be seen at some drugstore chains. Theyre re-setting their counters, not putting things too high or too low, [and] theyre putting carpeting in the store, she told the publication.On the flip side, Gen Ya young but equally largemarket segment will also be a major influence in retail. Merchants who want to reach millennial will need to invest in mobile, as they are thelargest group of Smartphone owners(and adoption is still growing).Speed is also an essential factor when it comes to reaching the Gen Y market. As a generation that grew up in an age where almost anything is just a click away, millennial have a tendency to be impatient. Retailers who want to engage them must invest in more robust order fulfilment systems and fast (but excellent) customer service.

2. Social networks will serve as shopping platforms:-The recent launches of shopping functionalities in the social realm (i.e.Facebooksand Twittersbuy buttons and CuralatesLike2Buy platformfor Instagram) tell us that social is going to get a whole lot more shoppable in 2015.Retailers that have already started participating in the trend include Nordstrom and Target, which are using the Like2Buy platform on Instagram, and Home Depot, (RED), and Burberry, which are testing Twitters buy button.In the screenshots below, you can see how Nordstrom is leveraging Instagram and Like2Buy to sell its products.A customer whod like to purchase an item she sees on the retailers feed can tap on the Like2Buy link found on Nordstroms Instagram profile. Clicking the link will take her to the retailers Like2Buy site, which looks similar to its Instagram page. When the shopper taps on an image, shell be taken directly to its product page, where she can find more details and proceed to checkout.

3.Brands Will double down on Corporate Social Responsibility:-Consumers these days are more drawn to retailers that invest in Corporate Social Responsibility (CSR). A survey byCone Communications and Echo Researchuncovered that 87 percent of global consumers factor in CSR into their purchase decisions.

In 2015, we expect more merchants to launch ethical and good deed initiatives. Examples of retailers pulling off CSR quite well include ModCloth, which recently signed an anti-Photoshop pledge, and Warby Parker, which implements a Give a Pair initiative to make eye care more accessible to the less-fortunate.How does CSR improve the shopping experience? Simple. It makes customers feel good knowing that theyre contributing to a worthwhile cause. As Adrianne Weissman, owner of apparel store Evelyn & Arthurtold us, shoppers want to know the money they are spending is not going into one persons pocket, but is truly making a difference in the community they live in.

4. Loyalty-wise, the points-for-purchases model will no longer be effective.:-Enriching and personalizing the shopping journey will no longer be limited to tailored product recommendations and offers. Forward-thinking retailers will find additional ways to make each customers experience unique and memorable. We predict that one of the areas that theyll focus on is customer loyalty.Customized perks will also be a big part of loyalty program success in the coming year. Research cited by eMarketer revealed that consumers have begun to expect more personalized offers and servicesnot just blanket discountsin return for their participation in rewards programs. Moreover, according to the study, consumers cited relevant discounts and personalized offers as the top benefits of such programs.

5. Retailers will adopt and experiment with technology:-Merchants will adopt and/or experiment with tech innovations and figure out how they can use them to improve the shopping experience. Well likely see more of the following in the coming year:

POS TECHNOLOGYInitiatives to make the cash register extinct will continue to go strong in 2015. Cloud-based point-of-sale systems have proven that they can outperform old-fashioned registers in all aspects (performance, functionality, looks) and an increasing number of retailers will recognize this and make the switch.Will you be one of the savvy merchants upgrading to a cloud-basedPOS systemnext year?Try Vend for freeand see how it can help you transform your business in 2015.

3D PRINTINGWe also anticipate 3D printing to slowly make its way into the retail world. Some merchants, including online jewelry storeBrilliance.com, have already found a use for the technology. Brilliance is using 3D mock-ups to help customers try on different rings so they can determine the right size, shape, carat, and diamond arrangement for their hands.

6. Data will be more accessible and powerful:-

Next year, we expect the number of SMBs usingbig dataand analytics to grow. Retailers will realize that they need to rely on data in order to get to know their customers and provide customized shopping experiences.Fortunately, there are plenty of solutions that make data analytics accessible and affordable for small and medium retailers.Swarmfor instance, gives brick-and-mortar stores the ability to analyze foot traffic so they can make better decisions and tailor customer interactions. Theres alsoCollect, which gives merchants insights into the spending habits of their top customers, allowing them to send personalized rewards and offers.Vendors will continue to develop and refine their solutions so they can provide the most accurate and insightful data in the fastest and most convenient ways possible.

7. Companies will find better ways to manage risk and protect customers :-The past couple of years have brought us far too many horror stories of data breaches in retail.AsChain Store Age cites, The 2014 Identity Fraud Study reported an increase of more than 500,000 fraud victims to 13.1 million people in 2013, the second highest number since the study began. Moreover, its been found that the average cost of a breach per organization in 2014 is $3.5 millionan increase of 15 percent from the year before.But its not just about the numbers. In this day and age, consumers arent just looking for unique and convenient shopping experiencesthey also want their purchasing journeys to be safe and secure.Thats why in 2015, we anticipate risk mitigation and data security to be among retailers top priorities.There are a number of ways retailers can better manage risk in the coming year. One is to instill awareness and training across the entire organization to ensure that everyone knows the importance of risk mitigation. Retailers can also be more selective of their vendors that handle their data and processes.We also expect merchants and solutions providers to come up with better ways to protect customer data.

8. More retailers will take control of their value chain and improve order fulfilment :-In their book, The New Rules of Retail, Robin Lewis and Michael Dart brought up an excellent point about modern retail success. According to them, if retailers truly want to provide compelling shopper experiences, they would have to take more control of how their products are manufactured, marketed, and distributed.As the authors put it, the most successful retailers will be the ones that have complete control of their value chain, from creation all the way to consumption.Notable retailers that have proven this strategy include Apple, Ralph Lauren, and Trade Joes. Despite having higher prices, these retailers managed to achieve customer loyalty and profitability thanks to their efforts to have complete value chain controla strategy that results in excellent products and customer experiences.Retailers will realize this in 2015, which is why well likely see an increase in value chain initiatives, single product retail, and private label merchandise.Additionally, more retailers will get creative with how they fulfill orders and distribute products. Speed and convenience will become more important than ever, so merchants will come up with better and faster ways to get products into the hands of their customers.

9. More ecommerce sites will set up shop offline :-In 2014, we saw a number of ecommerce-first businesses expand into the offline realm. Former online pure-play Birchbox, for example, opened its first physical shop in Soho last July, while companies like Bonobos and Warby Parker doubled down on brick-and-mortar by opening even more physical stores in 2014.We anticipate this trend to continue in 2015. Why? For one thing, the majority of overall retail sales are still taking place offline, and ecommerce sites have realized that they need to set up physical shops if they want to gain significant market share. Additionally, the need to provide seamless online to in-store experiences continues to grow, and successfully pulling this off requires both a digital and physical presence.Ecommerce sites setting up shop offline is, on one hand, good news for the brick-and-mortar realm because it validates the need for physical retail. However, this also means that Main Street is going to get a whole lot more competitive, and traditional brick-and-mortar retailers must step up their game in order to win.To do this, we predict that merchants will further enrich the in-store experience by offering services on top of stuff. Take for example, Birchboxs Soho location. In addition to playing video tutorials to keep shoppers informed and inspired, the retailer also offers hair, makeup and nail services in its store.

10. Retailers that localize their product mix and store formats will win :-Localization will be more important than ever. Merchants that customize their stores and merchandise according the needs of their local communities will find great success in 2015.Take for instance, OReilly Auto Parts, a retailer that tailors its merchandise mix from store to store. AsRetail Info Systems News reported, Each OReilly store is also a local store, carrying the tools, equipment and accessories that match the specific auto aftermarket needs of the stores customer base as well as the vehicles they own.Its important to note however, that neighbourhood-specific merchandise is only one part of a good local strategy. In addition to inventory, retailers will also need to tailor each of their store formats based on their respective communities and locations.Consider what retailers such as Starbucks, Target, and Chipotle are doing. In order to tap into dense, urban markets, these chains have started to deviate from their usual store formats to establish smaller, express stores in specific locations.Target opened its first express branch in Minnesota this year, while Starbucks and Chipotle both announced plans to build smaller format stores.We predict more stores will follow suit and tailor experiences, merchandise, and even store formats to the neighbourhoods they belong to. The ones that do (or that continue to do so) will win big in 2015.

Future Growth Rate of Retail Industry from 2013 to 2018:-Retail sales worldwideincluding both in-store and internet purchaseswill reach $22.492 trillion this year, according to new figures from eMarketer. The global retail market will see steady growth over the next few years, and in 2018, worldwide retail sales will increase 5.5% to reach $28.300 trillion.

This is eMarketers first-ever forecast of the global retail market and retail ecommerce sales worldwide. The complete forecast also includes a breakdown of total retail and retail ecommerce sales in 22 countries, as well as the number of consumers who shop and purchase goods via the internet in each of those markets.When it comes to retail products and services purchased on the internet, ecommerce will account for 5.9% of the total retail market worldwide in 2014, or $1.316 trillion. By 2018, that share will increase significantly to 8.8%, yet retail ecommerce will still account for just a fraction of in-store purchases even as it nears $2.5 trillion by the end of our forecast.

Retail Ecommerce Sales as a Percent of Total Retail Sales In Select Countries,2013-2018:-

The other two largest ecommerce markets, China and the UK, have much higher proportions of online-to-total retail sales than the US, and ecommerce trends in each market are unique. For example, digital buyersconsumers who purchase online at least once during the yearwill represent only 27.5% of Chinas population in 2014, while more than 10% of all retail purchases occur via the internet. This points to the fact that consumers in China who buy online do so often.

On the other hand, more than 73% of the UKs population will make a purchase online this year. With ecommerce accounting for 13.0% of total retail sales in the UKleading all countries by this metricthis high volume of digital buyers who purchase online often positions the UK as the third-largest ecommerce market, despite being only eighth-largest in total retail sales.

References :-1. https://www.vendhq.com/university/retail-trends-and-predictions-20152. http://www.emarketer.com/Article/Retail-Sales-Worldwide-Will-Top-22-Trillion-This-Year/10117653. http://www.ibef.org/industry/retail-india.aspx